Last-minute trial settlement unlikely

Revealing testimony has put the Microsoft antitrust trial back on the boil, and an 11th-hour truce appears unlikely, sources say.

January 2, 20024:43 PM PST

An 11th-hour settlement in the landmark Microsoft antitrust trial is unlikely before the trial resumes on
Tuesday, according to sources.

Sources said that trial is likely to proceed as
scheduled earlier this
month by U.S. District Court Judge Thomas Penfield Jackson. The resumption
of the trial, which was adjourned in late February and set to resume in the
middle of May, was delayed while Jackson presided over another trial.

The Justice Department and 19 states
allege that Microsoft is a
monopolist that has acted illegally to maintain market dominance with its
Windows operating system and to create a new monopoly in Internet software.

A key government complaint is that Microsoft folded its Internet Explorer
browser into Windows as a way of eliminating competition from Netscape Communications, now a
subsidiary of America Online.

Jackson had urged both parties to work on a settlement during the recess.
Microsoft chief Bill Gates has previously said that any settlement must be
guided by two key principles: the integrity of Microsoft's Windows
operating system and the continued freedom to innovate.

After two earlier settlement proposals submitted by Microsoft, the
government has concluded that the company's latest proposal does not go far
enough to repair the damage the software giant inflicted on the industry,
sources close to the case told the Seattle Times.

The hurdle seems to be Microsoft's unwillingness to add to the list of
business practices it will consider changing, according to the report.

When the trial resumes, each side will present three rebuttal witnesses.
Earlier, each side presented 12 witnesses.

Yesterday, Microsoft lawyers questioned IBM's Garry Norris, who will be a
key rebuttal witness for the government, for three hours at a deposition.
Norris testified that computer makers feared buying IBM's OS/2 operating
software because of threats from Microsoft, among other claims.

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